Anyone who claims to be someone official, as Mr O'Dell appears to have done, that uses a Hotmail email address should, in my humble opinion, be viewed with a massive degree of suspicion. Also the company is one month old according to the info.
Also - this guy says
It will become necessary for production companies to obtain a medical licence from the MHRA ( for the UK) or European equivalents. This may involve an ultimate cost of up to £1 million per supplier (unclear on this point)
Now, at risk of being called out as an ignoramus, I am 99% sure that this only applies to products that are manufactured and marketed as smoking cessation aids - just like nicotine gum, patches, sprays etc. Such products will fall under medicines licencing laws, all other products under the TPD as consumer products.
Also, the information regarding VAT is also not applicable to Chinese businesses. The onus for declaring the importation of goods from outside the EU falls fairly and squarely at the feet of the importer - regardless of whether they are an individual or a business. It is the importer who is liable to pay the relevant VAT and import duties. No one else.
The whole letter seems to be bordering on some kind of opportunistic scam to me, and I would say to the original poster, and any other Eastern manufacturer one simple thing:
"Keep manufacturing what you are. You will not lose business from the West". If the ludicrous Tobacco Products Directive is introduced as it currently stands, you businesses will go from strength to strength. Consumers in the West will adjust how they currently buy - whether as individuals or as formed cooperatives acting outside of whatever laws are introduced.